The processing sketch continuously takes screen captures and then takes the resulting pictures and averages all the colors together. That average color is fed down to the Arduino over its stock serial connection, where it is output to 3 of the pwm capable outputs. Those outputs are connected to the 2003 Darlington transistor array to switch the 12 volt led strip.

There are several comments on HaD recommending the Phillips ambient light. I was not able to find it in the LinuxMCE wiki, but it should be cool to try out. Here's a how-to DIY clone called Amblone: http://amblone.com/